Abstract
Pension funds serve to collect and manage an amount of capital, which is sufficient to make all payments to which participants of the fund are entitled, based on the pension plan they have chosen. The Akzo Nobel Pension Fund (APF) is responsible for the provision of pensions for all employees of Akzo Nobel in the Netherlands. It is the task of the Pensions and Insurance Supervisory Authority (PVK) to provide rules and regulations which guarantee that pension funds are able to fulfill their pension promises. In response to economic and demographic changes in the environment in which pension funds operate, the PVK drafted a new Financial Assessment Framework (FTK) that became effective as of January 1st 2006. Essential in the new FTK is the fact that the pension liability resulting from a defined benefit pension plan has to be calculated using market value interest yields as discount rates, as opposed to the current practice which uses a fixed rate for discounting pension liabilities.
